The People’s Bank of China is expected to maintain liquidity in the banking system by rolling over all CNY500 billion ($77.6 billion) of its one-year loans coming due, according to five of eight analysts surveyed by Bloomberg. The other three analysts expect the central bank to extend at least CNY400 billion ($62.1 billion) of the medium-term lending (MLF) facility.
On Wednesday, PBOC Governor Yi Gang told central bankers from G20 countries that China will support high-quality economic growth through prudent, flexible, targeted, reasonable, and appropriate monetary policy. The central bank is expected to keep its benchmark interest rate on the one-year lending unchanged at 2.95%.
Last week, the PBOC surprised the market by withdrawing short-term liquidity after the Golden Week holiday, a move that prompted a selloff in Chinese bonds. The central bank’s next move will indicate Beijing’s latest policy stance amid conflicting economic indicators such as weak consumption, robust exports, and rising inflation. Analysts said the PBOC would focus on dealing with an economic slowdown and the debt crisis in the country’s property sector.
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Published on October 15, 2021 3:01 PM (GMT+8)Last Updated on October 15, 2021 3:01 PM (GMT+8)
